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NCUF Research, Staff Financial Wellbeing, & Moving the Needle

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A report published by the National Credit Union Foundation — in conjunction with the University of Southern California’s (USC) Center for Economic and Social Research — shows credit unions can measurably increase their employees’ financial wellbeing through initiatives as simple as a prompting email.

The Foundation’s Start at Home report summarizes a two-year long grant project that explored whether positive saving behaviors — primarily splitting an employee’s direct deposit so a portion goes directly into savings — could be established through basic prompts.

Three credit unions participated in the project, including one from California: Educational Employees CU (Fresno, CA), Alabama CU, and Credit Human. Researchers from USC and Duke University oversaw program design, data collection and final analysis, with the project running from June 2020 to May 2022.

Employees at each credit union were randomly assigned to a control or a treatment group. The median increase for split deposits within the treatment group was 7.5 percent, compared to just 1.65 percent in the control.

Additionally, while not an intended output of the study, Start at Home provides directional evidence that taking action like allocating a fixed percentage of income to savings can have a positive effect on an individual’s subjective financial health. One participating credit union saw a 20 percent positive increase in their employees’ response to savings-specific metrics.

“We know credit union employees are just as financially vulnerable as the millions of members they serve, every day,” said Michelle Bonner, senior manager of financial inclusion and impact for the Foundation. “Credit unions are looking for ways to help their staff, and our Start at Home grant project shows that significant, measurable improvements can be made with essentially cost-neutral interventions.”

She added: “This initiative is absolutely replicable at other credit unions. Our hope is the report and its findings can be the spark that catalyzes others to take similar action.”

All three of the participating credit unions have confirmed their intent to continue and/or expand the current intervention.

A webinar featuring the grant participants and research is available here.

 

Financial Wellbeing as an Organizational Goal: Moving the Needle
How a credit union based in one of the nation’s most expensive cities integrated financial wellbeing into its strategy.

When your credit union is located in the second least affordable metro area in the United States — one where the median home price tops a cool $1 million — you tend to be aware that folks might be struggling financially. And not just your members.

“Having to sign employees’ hardship withdrawal paperwork on their 401(k)s really brought the point home,” said Geri LaChance, CEO of SESLOC FCU in San Luis Obispo, CA. “It was truly heartbreaking to realize the degree to which employees were struggling. I knew something had to change.”

She added: “I’ve worked in credit unions a long time. As a movement, we pride ourselves on that ‘people helping people’ philosophy but when you look around, there are perhaps greater financial disparities than ever before.”

The National Credit Union Foundation is “opening the system’s eyes to how we can make the credit union difference tangible” by placing financial wellbeing at the core of SESLOC’s strategy, LaChance said. “For us, we knew that first step had to support our own employees.”

Each year, SESLOC chooses one organizational goal that all employees are tasked with. For 2021, it was improved employee financial wellbeing. One step was raising salaries — marketplace realities demanded it and SESLOC has always worked hard to keep its wages at market value. But LaChance knew money was just one piece of the puzzle.

The financial wellbeing model endorsed by the Foundation considers four key areas: control, capacity, choice and goals. When viewed through these filters, an individual’s financial health becomes as much about how they feel about their money as how they use it.

“We knew we had to improve employees’ sentiment around their money,” LaChance said. “It wasn’t just the amount of it, but their ability to control it. To have and achieve goals.”

SESLOC created a list of activities designed to improve personal financial health. Over the course of 2021, each employee — including LaChance — was required to complete three specific financial health activities.

Employees chose from the list or defined their own goals. They could opt for three different items or do the same item multiple times. Some activities were very simple (reading informative, educational articles), others were more challenging; like starting to participate in SESLOC’s 401(k) or creating an emergency savings fund. As an enterprise goal, each employee documented their activities in SESLOC’s performance management system and shared what they learned.

SESLOC was cautiously optimistic going into the program. The results far exceeded their expectations. Roughly 15 percent of employees increased their 401(k) contributions by at least 1 percent; others began to contribute for the very first time. Another popular choice: emergency funds.

“That really blew us away,” said Devon Goetz, senior vice president of human resources and talent development. “We had employees with no savings at all who managed to save at least $400 by the end of the year — and many saved quite a bit more.”

Equally impressive were the comments employees shared. Many wrote about tracking their spending — and being shocked at how much they’d spent on frivolous purchases they really couldn’t afford. Others talked about their excitement at creating a budget for the first time and the pride they felt when they stuck to it. “Our employees wrote so sincerely about what they learned and how this benefited them and their families,” Goetz said. “It was a bit heart-wrenching to learn how much some of them had struggled, then so rewarding to see how excited they were about the changes they’d made.”

Accountability is a well-established way to be successful in achieving a goal and played a big role in program results. But something else was just as important: normalizing conversations about financial struggles.

“Who wants to tell their co-workers or their manager they’re having a hard time financially?” said LaChance. “This program helped employees see they weren’t alone. That it was ok to talk about your challenges and there were active steps you could take to get in a better place.”

Goetz added: “It’s part of the DNA of a credit union to do the right thing. Sometimes we need to remind ourselves, that means supporting our members and our employees on their financial journey. It means a lot to our employees, to me personally, to see SESLOC’s strategic commitment to this.”

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